News in Brief - 11 February
Employer transport tax
Chancellor Gordon Brown is set to slash tax on employer-provided transport ‘perks’ in next month’s Budget. The strongest possible hint of action in the Finance Bill came from transport minister Dr John Reid, under pressure from Labour MPs angry that company cars attract tax relief which encourages more mileage, while tax is charged on the ‘benefit’ of bus transport provided by employers which reduces the number of car journeys.
Revenue receipts on the up The Inland Revenue has generated income tax receipts of more than #117bn, 13% higher than the previous year, National Audit Office head Sir John Bourn said this week. In a report to parliament, Sir John said receipts rose by #7.7bn and corporation tax receipts by #2.6bn. This was offset against the Revenue’s cost of tax collection of #1.65m in 1997/1998.
KPMG and PC criticised KPMG and Price Waterhouse have been criticised by MPs over the quality of the financial advice they give to the government. The attacks were made when Cabinet Office Permanent Secretary Sir Robin Mountfield was roasted by a Commons committee over the failure to provide finalised accounts for the privatised bodies more than two years after the sale of Chessington Computer Centre, Recruitment and Assessment Services, and the Occupational Health and Safety Agency. MPs said the office had failed to meet their statutory duties in the sale.
Leicester E&Y office to close Ernst & Young is planning to close its Leicester office as part of a consolidation exercise in the East Midlands. The move does not involve any forced redundancies, and staff from Leicester will be relocated to the firm’s Nottingham office. Richard King, managing partner of the E&Y central region, said the firm was consulting staff on the proposals. Once confirmed, E&Y wants as many staff as possible to transfer.
Government blocks insolvency amendment The government is planning to block a bid to ban accountancy firms which have conducted an investigation from acting subsequently as receivers. A backbench bill amending the Insolvency Act to disqualify from appointment as a receiver or liquidator of a company any person or company called in to carry out a financial appraisal has been given a technical first reading by the Commons.
Opportunities being missed Accountancy firms are under increasing pressure to look for new business but miss out on more than 30 contract tenders every day, according to electronic database company Context.
Companies go to wall Quarterly figures for the end of 1998 published by the Lord Chancellor’s Department showed that more companies went to the wall and both creditors’ and debtors’ petitions rose when compared to the same time period the year before. Almost 3,000 company-winding-up petitions were registered, an increase of 8%, while creditor’s petitions rose to 4,420 (increasing by 3%) and debtor’s petitions increased by 22% to 2,693.
Groom elected VP of English ICA Wolverhampton-based accountant Michael Groom has been elected vice-president of the English ICA, with effect from 9 June. Now working as a non-executive director, he was elected to the council in 1975 and has held several top institute posts including treasurer, chairman of the Executive and chairman of the Accountancy Business Group, and was elected council chairman in 1998.
PAC slates Treasury bid The Public Accounts Committee has slammed a Treasury bid to delegate its accountability for major scandals within government departments. The PAC has protested ‘that the Treasury appear to be wishing to abdicate their responsibilities rather than delegate more to departments’.